The Kagome document about the purchase, purchase price and structure
From the above it seems, as pointed out by Hrishikesh… Kagome paid US$ 80 million to PBI to own 50% of India subsidiary and to own the access to Tasty Bite brand name and marketing channels from PBI. How much is paid for what is a key question for me … Can we make some intelligent guesstimate? Possibly they have a plan of mining the brand much deeply and differently than what is being done till date by PBI through TBEL’s manufacturing.
Key question for TBEL would be, how much this manufacturing unit in India (they project in US website that TBEL is a manufacturing unit) and Indian operation is valued in the entire deal ? …Is the Rs. 2000/- figure can be taken as a valid assumption? I think now Kagome is free to bring in / manufacture anything they like under Tasty Bite brand making it anywhere in the world … Like say, Japanese / Korean ethnic foods in Vietnam or in another unlisted company in India or hypothetically in their other JV in India, Kagome Ruchi. Am I missing something here?
At present two scenarios are possible… 1) TBEL continue to grow as usual but Tasty Bite brand grows much faster in US (which may have some rub off positive effect on TBEL); 2) Kagome ramps up many other lines of manufacturing in India (seems unlikely knowing conservative Japanese approach as they own only 50% in TBEL, but I can be wrong).
What else may be possible in this scenario and based on that actual valuation of TBEL may be possible. In my subjective opinion Mr. Market presently thinking Kagome acquisition is greatly value accretive for TBEL but it may or may not be depending on the strategies Kagome would adopt.
End of the day, we are interested in TBEL and not really in PBI.